Friday, 21 December 2012

Part IVA general anti-avoidance rule changes (update on submission)

This week The Tax Institute finalised its submission on the Government's draft changes to the Part IVA general anti-avoidance law.

We support the maintenance of integrity rules within the tax system to ensure that tax is levied fairly, consistently and according to the policy intention of the relevant tax laws. Widespread faith in the integrity of our tax laws is essential to securing taxpayer trust and voluntary compliance.

Part IVA plays a particularly significant role in safeguarding the integrity of the tax system, ensuring compliance with the intention, not just the letter of the tax law. As such, Part IVA should only be applicable in circumstances where the relevant taxpayer has acted in a blatant, artificial or contrived manner in order to pay less tax than would have been the case had tax been appropriately levied on the substance (rather than the form) of the transaction.

The Government's proposed amendments are unnecessarily extensive, place undue and inappropriate reliance on the purpose inquiry and are based on incorrect assumptions about the likely findings of the Courts in circumstances where the 'do nothing' counterfactual may have been put by taxpayers in other circumstances.

The amendments are complex and have caused much confusion and debate as to their actual and intended effects. The scope, breadth and effect of these amendments will require much litigation to resolve.

Nevertheless, if the Government proceeds with changes, we propose a narrower amendment that is restricted to only those changes considered necessary to address the perceived integrity concerns.

Finally I would like to wish all members a Merry Christmas and a Happy New Year. We will be back in the first week of 2013.

Robert Jeremenko
Robert
Jeremenko
Robert Jeremenko CTA is Senior Tax Counsel of The Tax Institute.

The Tax Institute is Australia’s leading professional association in tax. Its 13,000 members include tax agents, accountants and lawyers as well as tax practitioners in corporations, government and academia.

Thursday, 20 December 2012

A final word

A word or two about the final events for 2012. The Tax Specialists’ Workshop lived up to its reputation as a testing but satisfying engagement with the tough technical tax issues experienced by top tax advisers in the SME and big-end sectors. The groups were very ably led by extremely experienced practitioners who freely imparted knowledge to the delegates. There was also a seriously good dinner held at La P├ętanque.

The Noosa Tax Intensive finished off the year’s event program. It has an enviable reputation for delivering tax education in the best way, learning by doing, and of course, Noosa is almost always delightful in November. The Institute’s National Convention organisers must be vying for a Michelin star of their own because the selection of Berardo’s for the convention dinner was a quality decision.

And finally, it is quite sobering to realise that this is my last effort for the President’s Report. A year has almost gone by and so much has happened, all of it good (but with petty frustrations). It has been a great privilege to serve as president of The Tax Institute and to work closely with the staff and volunteers. The Institute is its people and they have performed magnificently in 2012.

Looking back over the past 11 months, there have been many high points. The most prominent has been sealing the arrangements with the Chartered Institute of Taxation and the introduction of the CTA qualification, and then the synchronising of the Institute’s structured education courses with these new arrangements. I am confident that the CTA qualification will live up to its potential as the gold standard for tax advisers throughout the Asia-Pacific region over the next decade, as is our ambition.

Consultation with, in particular, the ATO and Treasury proved to be both fulfilling and demanding (and with the odd frustration). Every one of our members can have an impact on the law and its administration — the president just gets a little more recognition from the authorities and that has been most satisfying.

It has been a wonderful experience — in some ways drawn too quickly to a close. But, on the other hand, there may now be some time for a holiday.

I know that the incoming president, Steve Westaway, will do an excellent job and I wish him well for what will undoubtedly prove to be a very exciting 2013 tax year.

Ken Schurgott
Ken
Schurgott
Ken Schurgott is President of the National Council at The Tax Institute.

The Tax Institute is 
Australia's leading professional association in tax. Its 13,000 members include tax agents, accountants and lawyers as well as tax practitioners in corporations, government and academia.

Wednesday, 19 December 2012

Tax Institute a finalist in the Publishers Australia Excellence Awards

National Convention

Included with your copy of the journal this month is a copy of the program for the Institute’s flagship National Convention, which in 2013 moves to Perth. Covering the latest technical content, the convention is your chance to hear from experts with real practical insights, and to catch up with your colleagues and peers.

Register before 25 January 2013 and receive early-bird pricing.

Tax Knowledge eXchange

Congratulations to the final two winners in our Tax Knowledge eXchange 10th anniversary celebrations. Celia Tang, CTA, Tax Consultant in Camberwell, Victoria, and Maria Day of Springfield in Queensland have both won a free subscription to Australia’s leading tax knowledge base.

Congratulations to all of our winners during our celebration of 10 years of the Tax Knowledge eXchange. If you haven’t taken a trial this year, make sure you do soon and see the benefits that our easy-to-use tax knowledge and research tool will deliver for your business.

iPad App: Taxation in Australia EXTRA

We’ve enhanced our Taxation in Australia iPad App, with new content and expanded commentary. If you haven’t downloaded our App, do so now and you’ll find ongoing coverage of compliance in each issue of Taxation in Australia EXTRA.

Publishers Australia Excellence Awards

I am proud to announce that Taxation in Australia was a finalist in the category of Association or Member Organisation Magazine of the Year in the Publishers Australia Excellence Awards. The only journal to win a place, the judging panel commented that “Taxation in Australia is clean and readable for such text-heavy, but relevant, copy”.

I hope you’ll join me in offering congratulations to the team that work so hard in bringing you this journal every month.

Celebrating 70 years

In 2013, The Tax Institute will be celebrating its 70th anniversary. Keep an eye out in the year for some exciting news and events around this significant milestone.

On behalf of all staff at the Institute, I would like to wish you a fantastic festive season and hope that you enjoy some well-earned time off with family and friends. The next issue of Taxation in Australia is due in February 2013, and I look forward to updating all members on our plans for 2013 in the New Year.

Noel Rowland
Noel
Rowland
Noel Rowland is Chief Executive Officer of The Tax Institute.

The Tax Institute is Australia’s leading professional association in tax. Its 13,000 members include tax agents, accountants and lawyers as well as tax practitioners in corporations, government and academia.

Monday, 17 December 2012

Reforming inefficient State taxes

Last week The Tax Institute, in conjunction with the Australian Tax Research Foundation, hosted an important tax reform event: Revolutionising State Taxes - Finding a way forward.

The event provided an important platform for discussion and debate about the pressing need for the reform of State taxes.

The Tax Institute has long called for a national vision for the reform of inefficient State taxes such as stamp duties that stifle a productive society. With the recent backdrop of the report of the Federal Government's GST Distribution Review Panel and next week's Treasurers' discussion of this report and also an options paper for State tax reform, the event provided a timely fillip to the debate.

The South Australian Treasurer, the Hon. Jack Snelling MP, called for a mature debate about how to reform the tax mix. He conceded that stamp duties were inefficient taxes and also called for the States and the Federal Government to start an open and transparent process of tax reform. He is in favour of discussing both the rate and the base of the GST and has drafted a reform plan with NSW Treasurer the Hon. Mike Baird MP.

Bruce Carter, a member of the GST Distribution Review Panel, talked about the almost impenetrable concepts of horizontal fiscal equalisation and vertical fiscal imbalance - key factors in calculating the GST revenue share for each State. Whilst the GST distribution model tries to make sure all States are able to offer the same level of services, he said that the financial position for the States is only deteriorating. This was due to factors including increasing demand for services and reducing revenue streams; States will have to 'cut their cloth'.

Michael Butler CTA provided a detailed and compelling tax practitioner perspective on State tax reform. If the community genuinely wants reform, there must be a principles-based discussion where everybody rolls up their sleeves, gets into the detail, and expresses their views. Talk is cheap - if there is to be genuine reform, a lot of hard work needs to be done and some very hard decisions need to be taken, including with respect to the GST.

The event received widespread coverage in the national media and we look forward to further pursuing these ideas in the New Year as we continue to strive to improve Australia's tax system.

Robert Jeremenko
Robert
Jeremenko
Robert Jeremenko CTA is Senior Tax Counsel of The Tax Institute.

The Tax Institute is Australia’s leading professional association in tax. Its 13,000 members include tax agents, accountants and lawyers as well as tax practitioners in corporations, government and academia.

Friday, 14 December 2012

End-of-year excitement for tax tragics

November has proved to be a very exciting month from a tax tragic’s perspective. We have experienced a generational change at the very top of the Australian Taxation Office administration. Michael D’Ascenzo’s retirement as Commissioner will cap off the renewal of the tax hierarchy, with only Second Commissioner Bruce Quigley remaining to pass on the decades of experience that have otherwise flown out the door.

Michael can look back proudly at the changes he has wrought during his term as Commissioner, the chief among them being his sincere engagement in collaboration and consultation. On behalf of everyone at The Tax Institute, including staff, volunteers and members, I wish Michael well in his new role.

If that is not enough, the appointment of a new Commissioner from the private sector, a first ever, raises intriguing possibilities. The Tax Institute also looks forward to working with the Commissioner-designate, Chris Jordan, in facing the challenges of imposing and maintaining tax laws and their administration. I am sure that the next seven years will be quite a journey for us all.

The Div 6 rewrite policy options paper was released (admittedly in late October) and its contortions began to filter into our psyche during November. Try as I might, I cannot find in it a beneficial simplification of the present mangled state of trust taxation. It can only be hoped that further consultation brings about a sensible outcome for us all — trustees, beneficiaries, tax advisers and, by no means least, tax administrators.

And then along came the exposure draft of the amendments to the general anti-avoidance provision, Pt IVA of the Income Tax Assessment Act 1936 (Cth). The proposed amendments have a certain metaphysical content in the sense that they perplex the mind with nice speculations of philosophy (with apologies to Samuel Johnson). Watching the courts struggle with new concepts like “non-tax effect” will be sport for years to come for us, the tax tragics. For the purpose of illustrating the metaphysical point, it is useful to set out the definition of that term here:

“non-tax effect means an effect other than:

(a) an effect relating to the taxpayer’s liability to tax (or withholding tax) in any year of income; or
(b) an effect that is incidental to achieving an effect, for the taxpayer, covered by paragraph (a).”

It should be noted for posterity that both of these measures (the Div 6 rewrite and Pt IVA) have and will continue to consume a huge number of precious volunteer man-hours in simply coming to grips with their potential impact.

As I write, the Assistant Treasurer, the Hon. David Bradbury, MP, has raised the tempo of debate on the taxation of the digital economy. While the technical matte rs are grounded in the traditional tax issues of source, residency and permanent establishments, the revenue at stake is so vast that no government can afford to ignore the matter. We can expect that the debate will become more intense as governments and revenue authorities collaborate internationally to secure their “fair share”.

Ken Schurgott
Ken
Schurgott
Ken Schurgott is President of the National Council at The Tax Institute.

The Tax Institute is 
Australia's leading professional association in tax. Its 13,000 members include tax agents, accountants and lawyers as well as tax practitioners in corporations, government and academia.

Wednesday, 12 December 2012

13 reasons to enrol The Chartered Tax Adviser Program in 2013

  1. Access global career opportunities
The Chartered Tax Adviser Program allows you to attain the prestigious Chartered Tax Adviser designation and become recognised for your tax expertise on the international stage.
  1. Relevant and practical tax training
The courses are designed by leaders in the tax field, in close collaboration with a wide pool of tax practitioners, to ensure that they are relevant, current and practical.
  1. Flexible study options available to fit your schedule
The Tax Institute understands that you are a busy working professional, and so offers a number of study opportunities throughout the year so you can arrange your preferred schedule.
  1. Education that is delivered by leaders, for leaders
Practising tax experts write, present and assess the courses, allowing you to gain direct access to this influential community of members and tax industry experts.
  1. Tax industry recognised
The technical breadth and practical relevance of The Chartered Tax Adviser Program course content is highly valued by employers as they provide immediate workplace application.
  1. Applied learning that is sought after by candidates
Career-minded professionals, seek out these courses for both their practical client focus and the application to common workplace compliance tasks. You will learn how to constantly engage with new and challenging problems and develop crucial business skills, making for a rewarding work life.
  1. Higher education provider exemptions
The Tax Institute courses receive recognition from a number of higher education providers, including UNSW, Atax and Curtin University.
  1. Specialise and strengthen your accounting credentials
In addition to formal university recognition, graduates can receive recognition for qualifications from the Institute of Chartered Accountants in Australia and CPA Australia.
  1. Achieve tax agent status
The Tax Institute is a Tax Practitioners Board (TPB) approved provider, allowing graduate of our Course in Australian Taxation Law to meet the education requirements for registering as a tax agent.
  1. Pathways for overseas professionals wishing to gain the basics in Australian tax
The CTA1 Foundations course is ideal for overseas professionals who wish to gain the basics to ensure they are “work ready” when they arrive in Australia.
  1. Different levels of dedicated education to suit your needs
The program provides 3 different levels of dedicated tax education (foundations, advanced and advisory) so you can step in or up to the level you need, at a time that suits your needs.
  1. A cost effective investment in your career, and future
Upon completing the program you will possess vastly specialised knowledge. This, coupled with business skills, ensures that as a tax professional you will be financially rewarded for the value you bring to the table.
  1. Ongoing career professional development through membership pathways
By enrolling in our CTA2 or CTA3 courses, you will have gain membership of The Tax Institute and the ability to keep your skills and knowledge up to date in the ever changing tax landscape.

We are now taking enrolments for The Chartered Tax Adviser Program for study period 1 in 2013. From CTA1 to CTA3, there is a course that is right for you. Find out more and enrol on our website.

Monday, 10 December 2012

A national plan for the direction of tax reform

Recently the Government released the GST Distribution Review Panel's report. Amongst other important options, including possible changes to mining royalties and the Minerals Resource Rent Tax, the report is yet another well-reasoned plea for the Federal Government to permit a debate on the rate and base of the GST.

The Tax Institute has long called for the hard work to start now such that we can achieve a national plan for the direction of tax reform.  This must include the Commonwealth and the States and Territories acting together.

Abolishing inefficient State taxes like stamp duty on homes must be considered in the context of discussing the entirety of the GST.

There is no point tinkering with one aspect of the GST, like the imported goods threshold, when time and again history has proven that tinkering with tax systems causes more harm than good. The only way to ensure that real reforms are achieved is to look at the tax system as a whole and that includes the whole of the GST.

Robert Jeremenko
Robert
Jeremenko
Robert Jeremenko CTA is Senior Tax Counsel of The Tax Institute.

The Tax Institute is Australia’s leading professional association in tax. Its 13,000 members include tax agents, accountants and lawyers as well as tax practitioners in corporations, government and academia.

Wednesday, 5 December 2012

The Chartered Tax Adviser Program now open for enrolments

Season’s greetings and best wishes for the festive season

As the year draws to a close, we celebrate our achievements and look forward to bringing members more great benefits and opportunities in 2013.

As 2012 quickly comes to an end, I’d like to take this opportunity to acknowledge the hard work of those involved in making the Institute the success it is. Many thanks to our committees and volunteers, our National Council, and particularly Ken Schurgott, our 2012 president, for their commitment and contributions throughout the year.

Chartered Tax Adviser Program now open for enrolments

Last month, we were proud to introduce The Chartered Tax Adviser Program at our well-received Chartered Tax Adviser information sessions which were held around Australia. The education program is dedicated to developing tax advisers with the professional skills, quality advice and acute commercial skills to join the growing international network of Chartered Tax Advisers.

By helping you progress through the program, from CTA1 Foundations to the pinnacle CTA3 Advisory Exam, the Institute is committed to propelling tax professionals like you into the future and onto the global stage.

You and your staff can enrol now in these practical and relevant courses for the 2013 study period 1.

Summer sale

Summer is here, and with it our summer sale. There’s great savings across our range of practical guides and handbooks, journals, CPD on DVD, and more. We encourage you to take a look range of products on sale at up to 30% off. We’re also offering a special “box set” of nine 2012 DVDs, including 23 CPD hours, at a saving of over $500.

2012 Annual Business and Professions Study

Many thanks to those of you who completed the 2012 Annual Business and Professions Study conducted by Beaton Consulting — your responses to the survey will help us improve member services and add value to your membership. Results will be available in 2013.

Noel Rowland
Noel
Rowland
Noel Rowland is Chief Executive Officer of The Tax Institute.

The Tax Institute is Australia’s leading professional association in tax. Its 13,000 members include tax agents, accountants and lawyers as well as tax practitioners in corporations, government and academia.

Monday, 3 December 2012

A proposed ethical framework for tax consultations

Last week The Tax Institute participated in the bi-annual Treasury Revenue Group Stakeholder Consultation meeting. These meetings are a Treasury initiative that started last year after the Government's Tax Forum. They are a welcome addition to Treasury's increased openness with respect to tax policy.

Treasury provided a presentation on the 2012 Mid-Year Economic and Fiscal Outlook as well as further details on their recent internal restructure aimed at better focusing resources and building further expertise in areas such as law design and small business tax issues.

On behalf of the attendees, I lead a discussion on the proposed ethical framework for tax consultations, about which I have written in previous posts. Effective consultation is essential to produce tax laws that are in the broader national interest and this framework has the potential to enhance this.

We also discussed tax reform opportunities stemming from the Australia in the Asian Century white paper as well as upcoming developments in the arena of state tax reform.

Robert Jeremenko
Robert
Jeremenko
Robert Jeremenko CTA is Senior Tax Counsel of The Tax Institute.

The Tax Institute is Australia’s leading professional association in tax. Its 13,000 members include tax agents, accountants and lawyers as well as tax practitioners in corporations, government and academia.